Go Lean to Optimize Practices, Increase CompetitivenessFri, 12/01/2017 - 16:34
Q: How would you describe Javid LLC’s growth during 2016 and in which areas is the company investing to continue expanding?
RR: Javid LLC now has 26 companies in its shelter program, eight of which were incorporated during the past few years, including Dormakaba, Edwards Vacuum Pumps, Shade USA and PEI-Genesis. Our goal is to incorporate at least three more by the end of 2017 and to raise our headcount to 3,000 employees. With more companies arriving in Mexico, demand for labor is on the rise but a lack of technicians has led companies to steal employees from each other. As a result, we are investing in lean manufacturing practices.
WM: Competitive labor costs are among the key reasons companies are coming to Mexico. If businesses are forced to increase salaries to retain or attract employees, they risk losing their competitiveness. Lean manufacturing practices will increase a company’s overall efficiency without the need to hire more employees. Javid LLC is adding lean manufacturing practices, supervisor training and leadership to its administration, finance, environmental compliance and IT services.
Q: How can Mexican companies benefit from lean manufacturing?
WM: Lean manufacturing improves on-time delivery and quality, which can represent a 10 to 20 percent cost reduction during the first two years. Subsequent improvements in production lines can reduce operational costs up to 3 percent during the following two years. We are implementing these practices in some of the companies Javid LLC manages and many of these are already seeing the benefits. We are also implementing strategies to develop qualified human capital, which is the most important resource a company can have.
Q: What other projects is the company developing to support local companies and employees?
RR: We believe in the capabilities of Mexican engineers and technicians so very few of our employees are foreign. Americans have the wrong impression of Mexico. Thirty years ago, Mexico’s manufacturing sector was “plug-and-play,” now it involves design, engineering and customer service.
WM: We are investing in training alongside universities such as Tec de Monterrey. Within Javid LLC we also support community-development projects and we are committed to providing our female employees equal pay. Fifty percent of Javid LLC executives are female and almost 60 percent of our employees are women.
Q: Javid LLC shelters many US companies. How is the strained US-Mexico relationship impacting your operations?
RR: The beginning of 2017 might have been slightly slower as Mexico’s relationship with the US cooled but since then I have received many calls from companies interested in coming into the country. Mexico and the US have a strong trade relationship and negative rhetoric cannot impede that. The maquila sector is the largest industry in Mexico and many companies are choosing the country over destinations such as China, Malaysia or Singapore. We expect that Sonora’s manufacturing sector will continue to grow because Mexico is simply a better bet.
Q: What are Javid LLC’s growth expectations in the short and long terms?
RR: Continuous improvement is our long-term plan. We will never stop growing as we will never be satisfied. Without change, companies will not be around very long. We are fully aware that we have to change to meet the demands of new customers and to help them become more successful.
WM: This year we plan to expand our operations in Nogales and we are considering opening offices in other cities in Sonora, such as San Luis Rio Colorado, Agua Prieta or Hermosillo, which are locations our clients are interested in. Within the next three years we will incorporate more companies and increase our presence in Sonora through community outreach programs.